John, a 40-year-old small business owner in Quebec, applies for a $1,000,000 life insurance policy naming his business partner, Marie, as the beneficiary. What condition regarding their relationship must exist for the policy to be valid at the time of application?

Question: John, a 40-year-old small business owner in Quebec, applies for a $1,000,000 life insurance policy naming his business partner, Marie, as the beneficiary. What condition regarding their relationship must exist for the policy to be valid at the time of application?

Answer options:

• John must have insurable interest in Marie's life. ✅ Marie must have insurable interest in John's life.
• They must be legally married or in a civil union.
• They must have been business partners for at least five years.

Correct answer: Marie must have insurable interest in John's life.

Explanation: For a life insurance policy to be valid, the policyowner or beneficiary must have an insurable interest in the life of the insured at the time the contract is formed. As business partners, Marie would suffer a financial loss upon John's death, establishing her insurable interest.